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APWU ‘Troubled’ by USPS Request for Rate Increase

APWU Web News Article #20-05, April 21, 2005

“The APWU is troubled by the Postal Service’s recent request for an across-the-board rate increase,” said union President William Burrus. “We are studying the proposed rates, and reviewing thousands of pages of data the USPS submitted to support its case.

“Based on an initial review, we are concerned by what we are finding,” he said, noting that the rate application proposes to increase the size of the discounts offered to companies that pre-sort their mail. The USPS filed the request for a 5.4 percent rate increase for all classes of mail on April 8, 2005. The Postal Rate Commission must approve the request before it can be implemented.

“Over the years, the mailing industry has established and expanded so-called ‘worksharing' discounts for mailers who ‘pre-sort’ their mail by bundling it according to its destination, and adding bar codes,” the union president said. “But the discounts far exceed the costs the USPS would incur if it sorted the mail itself. The USPS rate proposal exacerbates that dangerous policy.”

The union is examining how the discounts for various classes of mail would change under the proposed rates, as well as other features of the proposed rate adjustment. “The first-class letter non-automated presort rate should have been eliminated years ago,” Burrus said. “There is no justification for any discount, yet the size of the discount would increase with this rate proposal.

“The discounts for first-class letters pre-sorted by three digits and five digits should be shrinking, but they are getting larger.” The union is reviewing the rates for standard mail and drop-ship mail.

“The APWU has never accepted the numbers the Postal Service uses to justify ‘worksharing’ discounts; we believe those figures have been wildly exaggerated,” Burrus said. “Yet even those inflated numbers show the discounts exceed the costs the USPS avoids and – if the rate proposal is enacted – the excess would grow.

“Should the proposed rates be implemented, securing the financial health of the Postal Service may be made more difficult,” he said. “Ridding the USPS of these corporate giveaways is an urgent task.”

“The APWU is exploring the options for further action on this issue,” Burrus said.

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